What You Should Know About Credit Tradelines
Credit tradelines refer to the record of activities regarding the credit extended to you as the borrower. They require reporting to credit reporting agencies. The recording and reporting serve one primary purpose – to enhance your credit rating. In a sense, tradelines boost your credit score. They provide you with a leeway to find the financial breakthrough and reprieve you need.
The tradelines are also referred to as credit accounts. They always appear on your credit report. They appear in different forms, with the most common being payday advances, mortgages, car loans, and credit card, among others. Lines of credit that you obtain from different sources are also in that category. The tradelines perform a crucial role for creditors. They indicate whether you are truly creditworthy.
Not all tradelines are good though. Here, you only need positive tradelines, which refer to those with a good history of repayment. Anything else would affect your creditworthiness. It’s advisable to show some interest in your credit report. Ascertain that your credit report in order is a good proactive measure. Study it to confirm that it only contains accounts in good standing. The report should feature accounts that lenders and creditors have yet to report.
Often, lenders report accounts with late payments once 60 days from the due date have passed.
You enjoy many benefits by studying the report. Many of them contain inaccuracies. Look out for them the moment you obtain your report from a bureau or agency. In the United States, the law allows you to dispute and contest any errors you find on the report, courtesy of the Fair Credit Reporting Act. Visit the website of the Federal Trade Commission to see a few samples of the letters you can write to dispute the inaccuracies.
Contain Vital Information
Additionally, be cognizant of the sort of information that appears on the tradelines.
The information often includes:
- Details of your account
- Type of account
- Ownership of account
- Terms and status of payment (which is payment history)
- Key account dates
- Additional information on credit (which includes balances and limits)
Help You to Increase Credit
It’s possible to take some steps to increase your credit. One of these steps involves your monthly rent. Use the fact that you pay rent on time as a strategy for improving your credit. Check if the credit bureaus or agencies rely on the timely payment of rent when calculating credit scores. This will only work exceptionally well – and to your expectations – if you continue paying your rent on time. Avoid defaulting
As you add new accounts to your credit report, more credit would be available to you. This will then translate into more money available to you to purchase or pay for items in cash. Your family’s financial situation would also improve. Your quality of life would also receive a significant boost. It’s great to also use seasoned tradelines to add to the types of credit that you already have. Make yourself more responsible with payments before doing this.
Be careful with the type of tradelines that you add though. Adding tradelines works only if you focus on learning how to manage all the fresh credit accounts that are under your name. Be responsible in the way you use your credit card too. Otherwise, your only option would be to engage yourself in credit repair. Never ignore or underrate the important role your credit history plays in all these.
Do You Need New Tradelines?
Before you do anything, however, it would be great to decide whether there is a need to add or create these new tradelines. Additional tradelines are not worth adding if different credit sources show that you have good credit. They are also not worth adding to your history as these sources show that you pay all your debts on time. It’s worth noting that the new tradelines you add will only improve your credit scores up to a certain point.
Get Tradelines for Seasoned Authorized User
You may also need to look into the possibility of adding or buying tradelines for a seasoned authorized user (SAU). Such tradelines are exceptionally effective at boosting one’s scores, which then translate into a favorable credit report. Ask the agency for a free credit report to ascertain if the decision to buy SAU has borne fruits for you. After all, the law allows you to get a free copy of your report at least once every 12 months.
Lastly, are you in possession of older credit accounts that you no longer use? It would be a great idea to keep them open even if you never use them as regularly as you did before. Closing such accounts would deny you from the benefits that you would be entitled to under credit authorization ratio. Use whatever advantage you have to boost your scores by adding more tradelines.